Dear, rest of Canada.
The news headlines are filtering out regarding the NDP's budget tabled the other day in regards to the real estate world we live in. Some are arguing that its unfair. But I would argue that your 'fairness' scale needs some re-calibration before you get to say that with any accuracy.
BC is home to the most perverse distortions in the real estate market in Canada. The market it seems has been turned into a form of commodity trading for folks looking to hold cash, make a quick buck or launder dirty money from abroad. Now, the NDP government proposals will not fix these problems overnight as they're far more complex than a couple of tax code changes, but they're a good first few steps. Other steps I believe will draw in the police, federal tax auditors, etc. But, this is not an area I'm an expert in.
What the NDP has done has put a fee to empty homes being held out of the market, unless you live and work in BC. The NDP is putting a fee to obscene property values that have driven affordability out of reach for most middle income earners. The NDP is also expanding the foreign buyer tax on folks for real estate purchases in more areas of the Province.
These are taxation measures. The government hasn't banned anything. In fact, I'd argue that the Province simply doesn't have the jurisdiction to block a foreign national from buying property in BC.
Contrarian: But New Zealand does it! They've banned foreign real estate buyers!
Fact: New Zealand is its own country and can pass such laws, BC cannot.
The immediate blowback I've heard so far is that Canadians, who live outside BC but own vacation homes in the province, are upset at the extra taxes they may be assessed.
Let me address that for a moment. We have a housing and affordability crisis in BC where middle class folks can't afford to buy into the market at all, and rentals are often more expensive than a typical mortgage payment if a rental can be found at all. If push must come to shove, then the priority must go to those seeking their first home, not someone seeking their 2nd or 3rd (etc) home.
Because of the mismanagement of the real estate market in BC since 2006 under the BC Liberals, the industry conditions went out of control. Late to the party, the BC Liberals started to pull back the de-regulation they're responsible in 2016. But the damage was done and few can afford BC's urban markets where most folks live.
The second blowback I've heard is based on what impact the tax changes may have to high value properties by wealthy folks.
Buddy of mine specializes in hi-end bathrooms in precisely the type of houses you are trying to tax out of BC. Why do NDP'ers hate the trades so much? https://t.co/0izebGg7yU— Bill Brasky (@Polkameister) February 23, 2018
The problem with this narrative in the above tweet is that its a false narrative. What I mean is that if there's a wealthy home owner having a house built where the owner has decided to install an equally high value bathroom, they're probably prepared to pay whatever it takes to build what they want; including the hiring of highly skilled craftsmen/women and artisans for top dollar. Bravo to them. But not at the taxpayer expense.
My 2 bits
My 2 bits